(C) Business Potential Analysis, Light

AD HOC
MARKET RESEARCH
A.Valladares & Asociados

MARKET SIZE AND PROJECTIONS FOR
MILL LINERS AND SMALL GRINDING MEDIA
IN
CHILE & PERU

SAMPLE

s

IMPORTANT

Contents:
The period of reserve for this study ended over three years ago. In any case,
for added protection of original client's interest, all references to its name and
purposes in relation to the target markets have been omitted.

Rights of the model study:
Our intellectual property rights on this and other models of our Ad-hoc Markets
Analysis are protected by Chilean Law No. 17,336 and international law. Copy
or use without authorization is subject to sanctions.

Contact:
Alejandro Valladares Founder & Senior Analyst at A.Valladares&Asociados
Mobile: +569 9651 4651 e-Mail: avalladares@chilebras.com Skype: alejandro_valladares

A.VALLADARES & ASOCIADOS
(antes chilebras.com)
Desde 1995 en Análisis Ad-hoc de Mercados en Chile y América del Sur - más de cien clientes internacionales atendidos exitosamente
contactos: Alejandro Valladares, e-mail: avalladares@chilebras.com

Ad-hoc MARKET RESEARCH OBJECTIVES

 Stage 1: Analyse the market sizes and pricing practices corresponding to imported mill liners and
small grinding media for the mining industry in Chile and Peru.

 Stage 2: Investigate local producers in terms of capacity, sales and prices per product line, as well
as exports flows and end user‟s requirements of liners and small grinding media, concluding the
pricing and total market size in the last period of 12 months and a projection for 2010, in Chile and
Peru.

(antes chilebras.com) 4

Ad-hoc MARKET RESEARCH METHODOLOGY

PROD. CAPACITY, PROD. CAPACITY,
SALES AND PRICES SALES AND PRICES
FOR MILL LINERS FOR SMALL G. MEDIA

MAIN LOCAL
PRODUCERS

MILL LINERS INVENTORY OF
IMPORTS & MINING MILLS, PER
EXPORTS
TRADE MILL TYPE / E. USER

ANALYSIS MARKET END USERS
SMALL G. MEDIA
INVENTORY OF
IMPORTS &
NEW PROJECTS
EXPORTS
PER END USER

CLIENT

UNDERSTANDING UNDERSTANDING
CLIENT’S CLIENT’S
MILL LINERS GRINDING MEDIA

A.VALLADARES & ASOCIADOS 5

EXECUTIVE SUMMARY
Synthesis:
Conclusions

CHILE PERU
. .

BALLS: BALLS:
 In 2005, size of balls market was 583.7  In 2005, size of balls market was
million lb (184 USD million). Size of small 150,900,000 lb (41,3 USD million). Size of
grinding media segment was 28.4 million lb small grinding media segment was
(21 USD million), a 5% of total. 16,500,000 lb (11 USD million), 11% o total.
 Projection: Total market and small grinding  Projection: Total market and small grinding
media segment will grow a 18% between media segment will grow a 41% between
2005 and 2010. 2005 and 2010.

LINERS: LINERS:
 In 2005, size of liners market was 51.8  In 2005, size of liners market was
million lb (30 USD million). 12,300,000 lb (6.2 USD million).
Liners for SAG-type Plants, representing a Liners for Tradicional-type Plants,
77% of total mill liners consumption. representing a 67% of total consumption.
 Projection: Liners‟ market will grow a 18%  Projection: Liners market will grow a 41%
aprox. between 2005 and 2010. between 2005 and 2010.


INDEX

-Ad-hoc Market Research Objectives
-Ad-hoc Market Research Methodology
-Final Report :
CHILE PERU
Overview Overview
Small Grinding Media Small Grinding Media
Imports&exports Imports&exports
Local Production Local Production
Price Price
Market size Market size
Mill Liners Mill Liners
Price Price
Markets in 2010 Markets in 2010
Conclusions Conclusions

6

FINAL REPORT - CHILE

MINING OVERVIEW:
 Chilean mining is characterized by very big operations ( called Gran Mineria ) where Copper is
the dominant ore.

PRODUCCION IN 2004
Mineral MT* f ines Comments
Copper total 5.412.500 100%
gran minería 5.217.901 90%
other 194.599 10%
Gold 40 70% obtained as by-product in copper ores processing
Silver 1.360 100% obtained as by-product in copper and gold processing
Molibdeno 41.883 100% obtained as by-product in copper ores processing
Lead 2.286 One producer (Toqui) with two ball mills only
Mn (ore) 25.801 One producer (Atacama) with two ball mills only
Zinc 27.635 One producer (Toqui) with two ball mills only
Iron 8.003.500 One producer (CMP) with three ball mills only
* Metric Tons
Source: Anuario Estadístico 2004, COCHILCO

A.VALLADARES & ASOCIADOS 7


CHILEAN MINING OVERVIEW: Operation Ore
% % Milling &
Lixiviation Flotation (*)
 There are 22 big operations, treating ore via El Abra Copper 100% -
Zaldívar Copper 100% -
lixiviation and/or through milling and flotation Cerro Colorado Copper 100% -
plants also called Concentrators. El Tesoro Copper 100% -
Quebrada Blanca Copper 100% -
Lomas Bayas Copper 100% -
 Concentrators are 19, as Michilla-Lince Copper 100% -
 Codelco Norte has 3 Manto Verde Copper 100% -
Carmen de And. Copper 100% .
 Escondida, Codelco Andina, Codelco Codelco Norte (*) Copper 40% 60%
El Teniente and El Soldado have 2 Escondida (**) Copper 15% 85%
each Collahuasi Copper 20% 80%
Mantos Blancos Copper 50% 50%
Salvador Copper 30% 70%
Teniente (**) Copper - 100%
Pelambres Copper - 100%
Andina (**) Copper - 100%
Candelaria Copper - 100%
Bronces Copper - 100%
Soldado (**) Copper - 100%
Mantos de Oro (***) Gold 100%
El Peñón (***) Gold 100%
(*) Operation has 3 Concentrators
(**) Operation has 2 Concentrators
(***) Operation includes also gravity concentration stages
Sources : Operators & Anuario Estadístico 2004 COCHILCO

8


CHILEAN MINING OVERVIEW: CONCENTRATOR Proccesed Mineral

Name Type MT/Day MT/Month
 SAG Concentrators process 75% of
ores while Tradicional Concentrators Codelco - Chuquicamata SAG 70.000 2.100.000
responds by rest of 25% Tradicional (two) 100.000 3.000.000
Codelco - El Teniente SAG 50.000 1.500.000
Tradicional 75.000 2.250.000
SAG MTPD* 781000 75% Codelco - Andina SAG 35.000 1.050.000
Trad MTPD 262000 25% Tradicional 35.000 1.050.000
Total MTPD 1043000 100% El Soldado SAG 12.000 360.000
Tradicional 7.000 210.000
Escondida- Los Colorados SAG 120.000 3.600.000
 Older copper operations – all Codelco Escondida- Laguna Seca SAG 105.000 3.150.000
one‟s, for example- show tradicional Collahuasi SAG 125.000 3.750.000
plants togheter with SAG plants. But Pelambres SAG 120.000 3.600.000
Candelaria SAG 70.000 2.100.000
newer operations use SAG schemes Los Bronces SAG 55.000 1.650.000
only. Mantos de Oro SAG 17.000 510.000
El Peñón SAG 2.000 60.000
Codelco - Salvador Tradicional 34.000 1.020.000
 Most Concentrators have a regrinding Mantos Blancos Tradicional 11.000 330.000
stage and some of them an additional Monthly Totals - SAG Concentrators 781.000 23.430.000
grinding and flotation plant for Moly. Monthly Totals - Trad Concentrators 262.000 7.860.000
Monthly Totals - Sag + Tradicional 1.043.000 31.290.000
Plant availability, estimated average 95%
MTPD: Metric Tons Per Day
Annual Totals, after availability 356.706.000
Source : Operators

9


CHILEAN MINING OVERVIEW: MILLS INVENTORY

Operation Prim&Sec Grinding Regrind&Moly
Name Type SAG Bars Mills Balls Mills Balls Mills Vertical Total
 Concentrators operate 265 Mills Mills
mills, 211 (80%) in primary & Chuquicamata* SAG and Tradicional 3 16 34 15 68
secondary grinding and 54 El Teniente* SAG and Tradicional 2 22 44 4 3 75

(20%) in regrinding and /or Andina* SAG and Tradicional 1 3 11 2 17
El Soldado SAG and Tradicional 1 4 6 2 13
molybdenum plants. Escondida LC SAG 3 7 3 13
Escondida LS SAG 1 3 4 8
 Mills used to regrind and moly, Collahuasi SAG 3 4 5 12

comprises 33 balls mills and 21 Los Pelambres SAG 2 4 5 11
Candelaria SAG 2 4 1 1 8
vertical mills. This, associated Los Bronces SAG 2 3 3 8
with newer plants like as Mantos de Oro SAG 1 2 1 4
Escondida Los Pelambres and El Peñón SAG 1 3 4
El Salvador* Tradicional 5 9 4 18
Collahuasi. Mantos Blancos Tradicional 5 1 6
Total, units 22 50 139 33 21 265

 Codelco‟s Divisions explain a Total, %
*A Division of Codelco
8% 19% 52% 12% 8% 100%

67% of mills inventory. Its Source : Operators
CODELCO
„share‟ being lower in
Prim&Sec Grinding Regrind&Mol
SAG and Verticals. SAG Bars Balls Balls Vert. Total
Mills Mills Mills Mills Mills
Total units 22 50 139 33 21 265
Codelco 6 46 98 25 3 178
Other 16 4 41 8 18 87
% codelco 27% 92% 71% 76% 14% 67%
% other 73% 8% 29% 24% 86% 33%
Source : Operators
10

INDEX

-Final Report :
CHILE PERU
Overview Overview
Price Price
Price Price

11


SMALL GM / IMPORTS & EXPORTS :
 Chile imports 50 million pounds/year
CHILEAN IMPORTS AND EXPORTS PER YEAR
 53% cast and 47% forged
Flow Datos Total
 94% of total coming from Peru
IMP Weight in Lb 50.410.173
T. Fob (US$) 14.156.202
 Chile exports 122 million pounds/year Fob USD/Lb 0,281
EXP Weight in Lb 122.404.739
 6 % cast and 94% forged T. Fob (US$) 38.384.149
Fob USD/Lb 0,314
 87% of total going to Argentine
and Brazil Source: CHILEBRAS.COM based on peruvian and chilean official
trade information

 Price of forged GM is higher than cast
GM in 10% when imported and 16% PRICE OF IMPORTED / EXPORTED GM (USD/LB)
when exported CHILE
Size : 5" 3" 1" Total
Imp cif - 0,256 0,507 0,285
CAST
Exp fob 0,257 0,276 - 0,279
 The import as well as export prices Imp cif 0,393 0,309 - 0,309
show in general higher values in the FORGED
Exp fob 0,320 0,281 0,329 0,312
extreme sizes (1” and 5”) versus middle
size (3”).

12


SMALL GM / LOCAL
LOCAL PRODUCTION OF GRINDING MEDIA ( k Lb / year)
PRODUCTION: Player Capacity Production in Local Sales Imports Exports Local share
2004
 Key players in Chile are: Molycop Molycop 770.925 462.555 373.357 23.480 112.678 69%
(forged balls), Proacer (cast balls) Proacer 132.159 110.132 105.328 2.064 6.868 19%
and local filial of spanish Santa Ana Sabo 88.106 66.079 62.921 535 3.694 12%
de Bolueta-Sabo (forged).
Forged balls 859.031 528.634 436.278 24.015 116.372 81%
 Leader, is Molycop with a local Cast balls 132.159 110.132 105.328 2.064 6.868 19%
Total 991.189 638.767 541.606 26.079 123.240 100%
market share estimated in 69%, the
highest perceived product quality Sources: Interviews and secondary data (corporative reports and news)

and a services portfolio very
appreciatted by professionals.
LOCAL PRODUCTION OF GRINDING MEDIA - SIZES (inch)
 Forged balls explain a 81% of local Player Production Range Main Sizes *
consumption and cast balls a 19%. max size min size Sag mills Ball mills Regrinding
Molycop 6" 1" 5" 3" 1 1/4"
 Balls sizes that explain over an 80% Proacer 3" 1" 5" 3" 1"
of local consumption are: Sabo 6" 1 1/4" 5" 3" 1 1/4"
*Sizes that concentrate in the order of 80% of total productiom
 5” for SAG mills Sources: Interviews and secondary data (corporative reports and news)
 3” for bigger Balls mills, and
 1 to 1 ½” for Regrinding mills.

13


SMALL GM / PRICES
 USD 0.700 kg (0.318 /lb) was the LOCAL PROD. OF GM - PRICES (USD /lb)
more frequently mentioned price Player Price of main sizes Market Price *
between interwiewed persons, as 5" 3" 1" ( average )
being the actual market average, Molycop 0,341 0,318 0,363
aproximately. Proacer - 0,286 0,318 0,318
Sabo not info. not info. not info.
* When asked for an average price of balls, everybody mentioned USD 700 per ton
 Regarding the difference between Sources: Interviews
prices of cast and forged balls,
ranges is 10% to 15%.

 And there is also coincidence into
describe prices as being higher in
bigger and smaller balls, situation
mentioned as „ the price smile‟.

14


SMALL GM / END USERS
 While a convencional milling circuit consume 0,558 Kg/MT (1.229 lb/MT) of 3” and 1 ¼” balls, a
SAG circuit consume 0.742 Kg/ton (1.634 lb/MT) of 5”, 3” and 1 ½” balls.

 Following table opens the information gathered from local operators by plant type and ball size. It
shows that, in average, unitary mill balls consumption is 0,696 Kg/MT (1,533 lb/MT) and size of
chilean balls market is 265,0 k MT per year (583.8 million lb /year).

 Consumption of small grinding balls is 12,96 k MT (28.5 million lb) per year.

MILL BALLS MARKET

Plants Ball Size 5" 3" 1 - 1 1/2 " Total
SAG Kg 71.266.250 128.207.984 12.172.276 211.646.509 79,9%
781.000 MTPD Kg /MT 0,250 0,450 0,043 0,742
74,9% % 33,67% 60,58% 5,75% 100%
Tradicional Kg 52.596.500 788.948 53.385.448 20,1%
262.000 MTPD Kg /MT 0,550 0,008 0,558
25,1% % 98,52% 1,48% 100%
S+T Kg 71.266.250 180.804.484 12.961.223 265.031.957 100,0%
1043.000MTPD Kg /MT (av.) 0,187 0,475 0,034 0,696
100% % 26,89% 68,22% 4,89% 100%
Source: Operators

15


SMALL GM / END USERS

 Following table opens the information gathered from local operators by plant, size and price. It
shows that, balls price is 0,695 USD/Kg (0.316 USD/lb) and value of chilean balls market is
approx. 184,3 million USD per year.

 And as price of small balls is 0,750 USD/Kg (0.341 USD/lb), value of segment is approx. 9,7
million USD per year.

MILL BALLS MARKET

Plants Ball Size 5" 3" 1 - 1 1/2 " Total
SAG Kg 71.266.250 128.207.984 12.172.276 211.646.509 79,9%
781.000 tpd Kg /ton 0,250 0,450 0,043 0,742
74,9% % 33,67% 60,58% 5,75% 100%
Tradicional Kg 52.596.500 788.948 53.385.448 20,1%
262.000 tpd Kg /ton 0,550 0,008 0,558
25,1% % 98,52% 1,48% 100%
S+T Kg 71.266.250 180.804.484 12.961.223 265.031.957 100,0%
1043.000 tpdKg /ton (av.) 0,187 0,475 0,034 0,696
100% % 26,89% 68,22% 4,89% 100%
Price (Codelco) P (USD/Kg) 0,800 0,650 0,750 0,695
Market in USD Value(USD) 57.013.000 117.522.914 9.720.917 184.256.832
Source: Interviews

16


SMALL GM / MARKET SIZE :

Learnings:

 Small grinding media used by mining operators, range from 1” to 1 ½”

 Demand comes from regrinding and moly plants

 Size of segment is 13 k MT (28.5 million lb) /year

 And segment value is 9.7 million USD /year

17

INDEX

-Final Report :
CHILE PERU
Overview Overview
Price Price
Price Price

18


LINERS / IMPORTS & EXPORTS :
CHILEAN IMPORTS AND EXPORTS PER YEAR
 Chile imports 5.0 million pounds /year
Flow Datos Total
 equals FOB USD 4.7 million
IMPORTS Fob USD 4.708.410
 as u. price is USD/ lb 0.941 Weight, Lb 5.002.203
Fob USD / Lb 0,941
 And exports 0.80 million pounds/year EXPORTS Fob USD 755.109
 equals FOB USD 0.76 million Weight, Lb 795.880
Fob USD / Lb 0,949
 as u. price is USD/ lb 0.949 Source: CHILEBRAS.COM based on official trade data

19


LINERS / LOCAL PRODUCTON :
 Elecmetal, Talleres and Aceros Chile are the key players in this area. Market leader is
Elecmetal+Talleres, with a market share estimated in 75%, -as from December 2003 Talleres is
owned in a 60% by Elecmetal (40% remaining with Codelco).

 According our information and assumptions, total local offer is in ther order of 22.500 ton (49.6
million lb) that represents 28.6 million USD per year. So, in this moment, the average price is
1.27 USD/Kg (0.577 USD/lb).
MILL LINERS MARKET - LOCAL PLAYERS
Company Item Total % Liners Liners
Elecmetal
Loc.Sales USD 34.200.000 40% 13.680.000
Capacity Kg 12.500.000 75% 9.375.000
Price, av. USD/Kg 1,46
Talleres
Loc.Sales USD 19.400.000 40% 7.760.000
Capacity Kg 10.000.000 75% 7.500.000
Estimated market share of Elecmetal+Talleres, % 75%
T. Players
Loc.Sales USD 28.586.667
Capacity Kg 22.500.000

Sources: Interwiews and corporative data from players

20


LINERS / PRICES :

 Elecmetal and Talleres are driving a price recovery process, trying to move the price average from
USD/Kg 1,000 (USD/lb 0.45) to USD/Kg 1,000 (USD/lb 0.90). According to Aceros Chile, change is
showing results as new business are closed now in or near the desired price level.
 However, considering average market price is still in the order of 1.27 USD/Kg (0.577 USD/lb), this
process appears to need more time to accomplish a full effect. In this scenary, an average unitary
price for imported liners of USD/lb 0.94 seems very high for the moment as internal prices will
match its new level when new contracts impact real dispatch.
 Regarding pricing practices, players mentioned they actual process will probably give marginal as
steel cost is principal driver and in Chile liner business is regulated by international evolution. They
also mentioned that internal prices cann‟t grow over international one‟s as most mining operators
are multinational players and chilean economy is very open to imports.

21


LINERS / END USERS

 Unitary consumption of liners is 0,064 Kg/MT (0.141 lb/MT) in SAG and 0,056 Kg/MT (0.123
lb/MT) in Tradicional circuits, meaning a difference of just a 14%. However, as they grind 74,9%
of total ores, a 77,3% of total liners consumption comes from SAG circuits. Tradicional circuits
explain rest of 22,7%.

 As ball mills participate in SAG and Tradicional circuits, highest consumption correspond to
armours with a 49%. Then, come SAG Lifters (25%) and Liners (16%).

 Following table opens the information gathered from local operators by plant type and liner type.
It shows that, in average, mill liner consumption is 0,062 Kg/MT (0.137 lb/MT) and size of chilean
liners market is approx. 23,5 k MT per year (51.7 million lb/year).
MILL LINERS MARKET

LINERS Liner-type Lifters Liners Grates, o. Arm ours Ar. (rem ) TOTAL
SAG Kg 5.964.272 3.697.293 1.874.302 6.299.937 324.689 18.160.493 77,3%
781.000 MTPD Kg /ton 0,021 0,013 0,007 0,022 0,001 0,064
74,9% % 32,84% 20,36% 10,32% 34,69% 1,79% 100%
Tradicional Kg 5.259.650 71.723 5.331.373 22,7%
262.000 MTPD Kg /ton 0,055 0,001 0,056
25,1% % 98,65% 1,35% 100%
S+T Kg 5.964.272 3.697.293 1.874.302 11.559.587 396.412 23.491.866 100%
1043.000 MTPD Kg /ton 0,016 0,010 0,005 0,030 0,001 0,062
100% % 25,39% 15,74% 7,98% 49,21% 1,69% 100%
Source: Interviews

22


LINERS / END USERS

 Following table, opens the information gathered from local operators by plant-type, liner-type and
price. It shows that as average liners‟s price is, in this moment, estimated in around 1.27
USD/Kg (0.577 USD/lb) * value of chilean liners market is approx. 29.4 million USD per year.

MILL LINERS MARKET

LINERS Liner-type Lifters Liners Grates, o. Armours Ar. (rem) TOTAL
SAG Kg 5.964.272 3.697.293 1.874.302 6.299.937 324.689 18.160.493 77,3%
781.000 tpd Kg /ton 0,021 0,013 0,007 0,022 0,001 0,064
74,9% % 32,84% 20,36% 10,32% 34,69% 1,79% 100%
Tradicional Kg 5.259.650 71.723 5.331.373 22,7%
262.000 tpd Kg /ton 0,055 0,001 0,056
25,1% % 98,65% 1,35% 100%
S+T Kg 5.964.272 3.697.293 1.874.302 11.559.587 396.412 23.491.866 100%
1043.000 tpdKg /ton 0,016 0,010 0,005 0,030 0,001 0,062
100% % 25,39% 15,74% 7,98% 49,21% 1,69% 100%

P (USD/Kg) 1,27 1,27 1,27 1,27 1,27 1,27
Value (USD) 7.574.626 4.695.562 2.380.364 14.680.675 503.443 29.834.670
Source: Interviews

*According persons f rom Alecmetal and Aceros Chile, unitary price is similar f or majority of liners,
being weight the most relevant variable by f ar

23


LINERS / MARKET SIZE :

Learnings:

 Demand comes principally from SAG-type plants (77,3% in weight)

 Size of market is 23,5 k MT/year (51.7 million lb/year)

 Market value is 29,4 million USD /year

24

INDEX

-Final Report :
CHILE PERU
Overview Overview
Price Price
Price Price

25

FINAL REPORT

CHILEAN BALLS & LINERS MARKETS IN 2010

SCENARY 1 (more probable)

World copper demand stay on actual level, the country preserve its economical and political estability and, as economists
projects, chilean GDP grow a 5% per year.
Driving force for balls and liners markets –the evolution of copper proccessing Concentrators- projects strong as there is a
Solid set of expansions and new projects in course. Regarding type of Concentrators to be expanded or installed, trend is to
more SAG-circuits as majority of expansions and sulphur-based projects consider that scheme; a rather good example is
Chuquicamata (now Codelco Norte) that will expand by increasing its SAG plant (see Codelco Norte Master Plan in Annex).

Balls and liners‟s consumption will growth in direct proportion with chilean production of copper concentrates. And according
the Corporación Chilena del Cobre, Cochilco, in 2010 Concentrators will be grinding 1230 k MTPD instead of actual 1043 k
MTPD. An increase of 18%.

Then, both balls and liners markets will growth in aproximately a 18% in the period and, as SAG-type Concentrators include
at least one regrinding stage, the small balls (1” to 1 ½” ) consumption will also growth a 18%.

SCENARY 2 (less probable)

Internacional demand for copper falls and local Concentrators diminish its actual grinding rates. Both expansions and new
decide to wait for better times.

Again, both balls and liners markets will show the same tendency as Concentrators‟s milling rates.

26

INDEX

-Final Report :
CHILE PERU
Overview Overview
Price Price
Price Price

27

CONCLUSIONS

BALLS: LINERS:

 In 2005, size of balls market was 583.7  In 2005, size of liners market was 51.8
million lb (184 USD million). million lb (30 USD million).

Size of small grinding media segment Liners for SAG-type Plants, representing a
was 28.4 million lb (21 USD million), a 5% 77% of total mill liners consumption.
of total.
Average price for total liners market was
And average price for total balls market 1.25 USD/Kg (0.577 USD/lb) .
was 0.316 USD/lb and 0.341 USD/lb in
the case of small grinding media  Projection, is liners market will grow a 18%
segment. aprox. between 2005 and 2010.

 Projection, is total market and small
grinding media segment will grow a 18%
between 2005 and 2010.

28

INDEX

-Final Report :
CHILE PERU
Overview Overview
Price Price
Price Price

29

FINAL REPORT - PERU

MINING OVERVIEW :

 Peru is an important producer of several mining products, but its mining represents in total only a
4% of 68 USD Billion peruvian PIB (versus the 8% of a 90 USD Billion PIB in the case of Chile).

PRODUCCION METALIC ORES, 2004
MINERAL TON FINES IN WORLD
ZINC 1.300.000 3º  Big operators are just a few.
COPPER 935.000 5º
LEAD 300.000 4º COPPER PRODUCTION MOLY PRODUCTION
TIN 40.000 2º Operator Share % Operator Share %
MOLY 8.900 4º Southern Copper 38% Southern Copper 75%
SILVER 2.800 2º Antamina 36% Antamina 25%
GOLD 200 8º Tintaya 11%
Source: Ministerio de Minería del Perú Cº Verde 9%
Otros 6%
Total 100% Total 100%

ZINC PRODUCTION GOLD PRODUCTION
 96% of total production come from Operator Share % Operator Share %
big operations (Gran Mineria). Antamina 19% Yanacocha 52%
Volcan 19% Barrick 12%
CONCENTRATION LEVEL
SEGMENT % Quenuales 15% Otros 36%
GRAN MINERÍA 96% Milpo 8%
MEDIANA 4% Otros 39%
LEAD 0% Total 100% Total 100%
TIN 100%
Source: Ministerio de Minería del Perú
Source: Ministerio de Minería del Perú

30

FINAL REPORT - PERU

MINING OVERVIEW : PLANTS INVENTORY
Operation
 Actually, major peruvian operators grind 264,3 k Operator Concentrator Plant-type Milling MTPD
MTPD of copper, moly, zinc and lead ores. Antamina Yanacancha SAG 80.000
Southern Cuajone Tradicional 87.000
Distribution per plant-type, is: Southern Toquepala Tradicional 60.000
 70% in Tradicional plants Tintaya Tintaya Tradicional 15.000
Volcán Paragsha Tradicional 8.500
 30% in a SAG plant Volcán Other units Tradicional 4.500
Quenuales Casapalca Tradicional 2.700
 Antamina‟s 80 k MTPD plant is the only SAG Quenuales Iscaycruz Tradicional 2.600
circuit operating in Peru and produces 36% of Milpo El Porvenir Tradicional 4.000
total Cu, 75% of total Mo and 19% of total Zn. Total 264.300
CºVerde project* Cerro Verde Tradicional 108.000
Total, MTPD 372.300
 Phelps Dodge‟s 108 k MTPD Cerro Verde project
will start-up in 2007, total peruvian grinding will * Start-up in 2007
grows up to 372.3 k MTPD and distribution per Source: Operators, Ministerio de Minería del Peru
plant-type, will pass to:
 79% in Tradicional plants
PLANTS INVENTORY
 21% in a SAG plant
2005 2007 *
Type MTPD MTPD
nº nº
Details, in Annex. Tradicional 11 184.300 70% 12 292.300 79%
SAG 1 80.000 30% 1 80.000 21%
Total 12 264.300 100% 13 372.300 100%
*With Cerro Verde

31

FINAL REPORT - PERU

MINING OVERVIEW :
 Peruvian Concentrators operate 132 mills. With Cerro
Verde, number of mills will be 144, 107 (74%) in primary & MILLS INVENTORY
secondary grinding stages and 37 (26%) in regrinding Prim&Sec Grinding Regrind & Moly
Total
stages. SAG Rolls Bars Balls Balls Vert.
1 4 14 88 28 9 144
107 37 144
 Concentrators used to regrind with balls mills; however, 74% 26% 100%
Antamina already went to verticals and Cerro Verde will
install verticals too.
MILLS INVENTORY
Operation Prim&Sec Grinding Regrind&Moly
Operator Concentrator Plant-type Milling MTPD SAG Rolls Bars Balls Balls Vert. Total
Mills Mills Mills Mills Mills Mills
Antamina Yanacancha SAG 80.000 1 3 5 9
Southern Cuajone Tradicional 87.000 10 4 1 15
Southern Toquepala Tradicional 60.000 8 25 8 41
Tintaya Tintaya Tradicional 15.000 3 2 5
Volcán Paragsha Tradicional 8.500 3 5 3 11
Volcán Other units Tradicional 4.500 3 31 8 42
Quenuales Casapalca* Tradicional 2.700 0
Quenuales Iscaycruz Tradicional 2.600 3 1 4
Milpo El Porvenir Tradicional 4.000 4 1 5
Total 264.300 1 0 14 84 27 6 132
CºVerde project** Cerro Verde Tradicional 108.000 4 4 1 3 12
Total, MTPD 372.300 1 4 14 88 28 9 144
* Pending data
** Start-up in 2007
32
Source: Operators, Ministerio de Mineria del Peru (antes chilebras.com)

FINAL REPORT - PERU

MINING OVERVIEW :

 1250 and 1000 hp vertical mills
Vertical Mills
are the more frequently used.
Antamina Mill-type Q HP Size
There is no addicional information Concentrator Yanacancha Sag 1 27.000 38X21'
about peruvian vertical mills, but Circuit-type SAG Balls 3 15.000 24x36'
Metso Vertimills were mentioned Capacity 80 k tpd Vertical 2 1.250
Vertical 2 1.000
as equipments Cerro Verde would Vertical 1 100
surely use.
Cerro Verde Project Type Q HP Size
Concentrator Cerro Verde Balls 4 16.000 24x35'
Circuit-type Tradicional Rolls 4 6.700
Capacity 108 k tpd Vertical 3 1.250

33

INDEX

-Final Report :
CHILE PERU
Overview Overview
Price Price
Price Price

34

FINAL REPORT - PERU

SMALL GM / IMPORTS & EXPORTS :

 Peru exports 61.3 million pounds/year *. PERUVIAN IMPORTS AND EXPORTS PER YEAR
Flow Datos
Imports Weight in Lb 7.637.969
FOB export prices being higher for 5” T. Cif (US$) 2.129.506
and 1” than for 3”. Again, a „price smile‟. Cif USD/Lb 0,279
Exports Weight in Lb 61.284.922
T. Fob (US$) 16.608.549
 Peru imports 7.6 million pounds/year *. Fob USD/Lb 0,271
Source: CHILEBRAS, based on official trade information
 77% cast (coming from China)
PRICE IMPORTED / EXPORTED GM (USD/LB)
 23% forged (c. from Chile) PERU
Size : 5" 3" 1" Total
Imp cif - - 0,226 0,257
CAST
CIF import price for forged balls is 0.335 Exp fob - 0,238 0,203 0,240
USD/lb and for cast balls is 0.257 Imp cif - - 0,336 0,335
FORGED
Exp fob 0,335 0,291 0,418 0,296
USD/lb. Source: CHILEBRAS, based on official trade information

* Details in Annex

35

(C) Business Potential Analysis, Light

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